IT Sourcing Europe provides a brief summary of the major trends of the Norway’s software development outsourcing market in 2010.
IT Sourcing Europe, a UK-based nearshore IT Outsourcing (ITO) research and advisory company, announced today the completion of its Norwegian ITO survey, conducted in the frames of the ongoing All-European IT Sourcing and In-House Software Development Research 2010. The survey aimed to explore the key trends and hallmarks of the Norwegian software development outsourcing market in 2010. To conduct the survey, IT Sourcing Europe reached its vast network of Norwegian business contacts from all of the major verticals (from IT, telecom, web and mobile development to hospitality to finance and banking etc) and invited corporate IT decision makers to share their outsourced software/web development experiences with a broader business community both within and outside of Norway. As a result, 134 companies provided an input to the survey.
According to the survey findings, in 2010 the number of companies outsourcing their software development (SD) nearshore (i.e. maximum 2 time zones away from Norway) exceeds the number of those who outsource offshore (i.e. more than 2 time zones away) with a ratio of 32% vs. 27%. The top three drivers of decisions to outsource a corporate SD function are: difficulty finding appropriate IT resources and specific skills within Norway (31% of respondents), pressure to reduce operating costs (23%) and necessity to improve business development strategy (15%).
Regarding actions that most of Norway’s companies take prior to signing their ITO contracts, 28% of survey participants conduct an in-house analysis of the areas to be outsourced, 26% rely on positive vendor’s references from the fellow businesses with SD outsourcing experience and 18% of companies hire or promote a manager to lead the entire outsourcing process.
Regarding the volume of the outsourced software development in Norway, the majority of companies (39%) outsource 40% – 59%, 14% of companies – 90% – 100% and only 6% of companies – less than 10% of their SD function.
Web 2.0 (Microsoft ASP.NET, Java, EpiServer, open source etc) remains the most outsourced area of expertise (by 37% of companies), followed by Enterprise 2.0 (J2EE, J2SE, C#, MySQL etc) (21% of companies) and mobile development (19%). Only 8% of Norwegian companies outsource embedded development.
Regarding the actual savings, 37% of companies polled save 10% – 24%, 25% of businesses – 40% – 59%, 12% of companies – 60% and more and 9% of companies – less than 10% of operating costs from their outsourced development.
Overall, the majority of Norwegian companies – 30% – admit that outsourcing their software development to a 3d party has been the right decision versus only 1% of companies who are very dissatisfied with the decision to outsource.
In the future, 42% of current outsourcers plan to locate their SD function nearshore versus 12% who plan to go offshore.
More thought-provoking findings are available in the Norway’s ITO Intelligence Report 2010.
(Data courtesy of IT Sourcing Europe. Any reprint requires a link to IT Sourcing Europe’s website)